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Comfort package for finance companies to be announced this week

The Central Bank will shortly announce details of a `comfort package’ to registered financial institutions that will ensure their liquidity in the event of problems arising from current problems in the financial services sector, Governor Ajith Nivard Cabraal said yesterday.

President Mahinda Rajapaksa Thursday met with representatives of registered finance and leasing companies where he indicated government support in the event of need to regulated and registered companies.

``The system cannot be allowed to falter,’’ Cabraal said yesterday. ``Our people are working on the scheme and we hope to announce it early next week. We will look after the registered companies.’’

Endangered companies can pledge reserves and assets that are illiquid to secure such assistance said the Governor who stressed that ``we won’t allow them to fail.’’

The president dealt a kidney punch to a business leader who made suggestions on micro finance and self-help credit to small entrepreneurs saying, ``all that is well and good but first bring back the money that has been sent abroad.’’

That provoked a titter.

Asked whether there was an outflow of funds from finance companies to government securities and banks consequent to the Golden Key collapse, Cabraal said that outside those of the affected group, there was no major problem.

The Central Bank Governor, the two deputy ministers of finance (the president is the minister), SDr. Sarath Amunugama and Mr. Ranjith Siyambalapitiya and Ministers G.L. Pieris and Bandula Gunawardana were associated with the president at last week’s meeting.

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